2 Mar 2016

Unconsented bathroom costs estate agent $5000

9:24 am on 2 March 2016

Selling a family member's non-compliant apartment has cost a Wellington real estate agent $5000.

The Real Estate Agents' Complaints Assessment Committee found Mike Brodie, who runs his own real estate agency, guilty of unsatisfactory conduct over the sale of his brother's partner's apartment to an unnamed woman in August 2014.

The deal went unconditional on 8 September; Mr Brodie had learned earlier that day the apartment had an unconsented bathroom and rung to tell the buyer.

The deposit was paid on 9 September and the following day the parties agreed the buyer would retain $20,000 until the bathroom issue was resolved, with settlement to occur on 22 September.

About two weeks later the buyer asked Mr Brodie about the outstanding Code of Council Compliance (CCC) and was told the seller "advised him consent is imminent".

However, since then two applications to Wellington City Council (WCC) have been suspended as they included outdated plans; unknown to the buyer, the apartment had been changed from two bedrooms to one.

The bathroom was still non-compliant as at 14 April 2015 and the WCC had issued a "notice to fix", making it a defective property.

The buyer told the committee she had been left with an apartment which would take close to $60,000 to fix, had spent $4445.50 on legal fees to try to resolve the situation, had had to pay interest on a loan for a year and had lost the rental income she intended to receive from the property.

"The problems with the apartment have caused her much distress and she now has a court case ahead of her."

The committee said it should have been obvious to Mr Brodie an unconsented bathroom renovation could lead to serious issues for the buyer.

"... it was important he ensured the (buyer) had the ability to step back from the agreement, and that she and her solicitor receive detailed information on this disclosure to protect (her) from the very situation she now finds herself in."

The committee found Mr Brodie guilty of unsatisfactory conduct and fined him $2000. It also ordered him to pay the buyer $3000 towards her legal fees.

The buyer told RNZ News she planned to appeal the decision as she did not believe it was strong enough.

Mr Brodie told RNZ News he could not comment pending the appeal.

WCC general manager of compliance and consents Mike Scott said the case highlighted the importance of homeowners doing their homework and getting the necessary building consents for work.

"It makes real sense to understand whether you need to get a consent or not but, going to the heart of it, it's more a point of doing your due diligence so that you don't end up in a situation where, if you do go to sell the property, you have any outstanding issues."

Some work, such as a straight kitchen replacement when plumbing stayed essentially in the same place, did not require consent, he said. However, moving a kitchen to another room would require one.

Mr Scott said ignorance was no defence, given the amount of readily available information.

"As I say to my children, Google is your best friend."

Get the RNZ app

for ad-free news and current affairs